Image credit: Philip Reinagle, “John Nicholson, a Cambridge Bookseller” (1788), Cambridge University Library
Guest post, MutualFundObserver.com, June 30, 2014
By Jason Zweig
As to my reading diet: If you want to think long-term, you canât spend all day reading things that train your brain to twitch. When Iâm not interviewing portfolio managers or other investors, I like to read the latest research in cognitive and social psychology, behavioral finance, neuroscience, financial economics, evolutionary biology and animal behavior, and financial history. (As a journalist, I get new-article alerts and press access from hundreds of academic journals. If youâre not a member of the Fourth Estate, you should closely follow the science coverage in a good newspaper like The Wall Street Journal or The New York Times.) Here, Iâm looking for new findings about old truths â evidence thatâs timely about aspects of human nature that are timeless.
Online, I like the blogs Farnam Street and BrainPickings;Â Morgan Housel,Â Matt Levine atÂ Bloomberg View, Bob Seawrightâs âAbove the Market,â Tom Brakkeâs âthe research puzzleâ; anything that Bill Bernstein writes; the Fama/French Forum. In my day job, I canât utterly ignore whatâs going on in the short term, so I follow The Big Picture, The Reformed Broker and The Epicurean Dealmaker, who will have short, sharp takes on whatever turns out to matter.Â This list isnât complete, and Iâve just offended a lot of my friends by leaving out their names because Iâm on deadline today.
Every investor worthy of the name must readÂ Where Are the Customersâ Yachts?Â by Fred Schwed Jr.,Â The Money GameÂ by âAdam Smith,âÂ Against the GodsÂ by Peter Bernstein, the Buffett biographies by Alice Schroeder and Roger Lowenstein,Â A Random Walk Down Wall StreetÂ by Burton Malkiel andÂ The Intelligent InvestorÂ by Benjamin Graham (disclosure: I am the editor of the latest revised edition and receive a royalty on its sales, although you donât have to read that edition). These books arenât optional; theyâre mandatory. Reading seven books is a much cheaper form of tuition than the mistakes you will make if you donât read them.
When Iâm not at work, I make a special point of reading nothing that is investment-related. I read fiction that has stood the test of time; history and historical biographies; books on science; books on art.
The ânon-investingâ books that every investor should read are:
- at least one of the Richard Feynman oral biographies (any one will do; I likeÂ Surely Youâre Joking, Mr. FeynmanÂ andÂ What Do You Care What Other People Think?)
- Darrell HuffâsÂ How to Lie With Statistics
- Bertrand RussellâsÂ Sceptical EssaysÂ andÂ The Scientific OutlookÂ (if not all of his non-technical books)
- MontaigneâsÂ Essays
- Daniel KahnemanâsÂ Thinking, Fast and SlowÂ (disclosure: I helped Dr. Kahneman research, write and edit the book, but I donât receive any royalties from it)
- an introduction to David Humeâs philosophy and preferably the original work (e.g.,Â An Enquiry Concerning Human Understanding)
Learning how to think is a lifelong struggle, no matter how intelligent or educated you may be.Â Books like these will help.Â The chapter on time in St. Augustineâs Confessions,Â for instance, which I read 35 years ago, still guides me in understanding why past performance doesnât predict future success.
Source:Â guest post, Mutual Fund Observer